financial statement q1 2018 - ir.washtec.de reports... · washtec will be presenting the digital...

Financial Statement Q1 2018

WashTec AG Financial Statement Q1 2018 Highlights and Key Figures 2Q1 2018

Revenue €91.5m (prior year: €101.2m);

EBIT €5.4m (prior year: €12.1m)

Revenue and EBIT decrease in comparison to atypically

strong Q1 2017 with 32% revenue growth

Dividend of €2.45 per share to be proposed at Annual General

Meeting

Guidance for 2018 confirmed: Full-year revenue growth of

around three percent with significant improvement in EBIT

Business performance as expected in first quarter of 2018

1st quarter

(rounding differences may occur)

Q1 2018 Q1 2017

absolute in %

Revenue € m 91.5 101.2 –9.7 –9.6

EBITDA € m 7.9 14.5 –6.6 –45.5

EBIT € m 5.4 12.1 –6.7 –55.4

EBIT margin in % 5.9 12.0 –6.1 –

EBT € m 5.3 12.0 –6.7 –55.8

Employees at reporting date persons 1,830 1,768 62 3.5

Average number of shares units 13,382,324 13,382,324 0 0

Earnings per share1 € 0.20 0.64 –0.44 –68.8

Free cash flow 2 € m –3.0 10.8 –13.8 –127.8

Capital expenditure € m 2.2 3.0 –0.8 –26.7

Capital ratio at reporting date3 in % 40.9 42.7 –1.8 –

ROCE in % 25.6 32.4 –6.8 –

1 Basic = diluted2 Net cash flow – net cash flow from investing activities3 Equity capital/balance sheet total

Change


Highlights and Key Figures for Q1 2018

1. Overall revenue and earnings development

in the quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

2. Report on economic position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

2.1 Dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

2.2 Earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

2.3 Net assets and financial position. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

3. Outlook, opportunities and risk report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

3.1 Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

3.2 Opportunities and risks for group development . . . . . . . . . . . . . . . . . . . . . . .8

4. WashTec shares and investor relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

4.1 Share price performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

4.2 Shareholder structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

4.3 Annual General Meeting on April 30, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

Selected Financial Information for Q1 2018

Consolidated Income Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Consolidated Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Consolidated Statement of Changes in Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Consolidated Cash Flow Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Consolidated Segment Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Reconciliation Consolidated Balance Sheet as of Dec 31, 2017 . . . . . . . 16

Contact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Financial Calendar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Content


Highlights and

Key Figures


Quarterly Statement

1. Overall revenue and earnings development in the quarter

Revenue through to March 2018, at €91.5m (prior year: €101.2m),

was 9.6% down on the prior year, adjusted for exchange rate effects

6.9%. It must be noted in this connection that business performance

in the first quarter of 2017 was particularly strong due to orders from

major customers. Growth was 32% compared with 2016. This re-

sulted in lower revenue in Equipment and Service compared with the

prior year. In Chemicals, lower numbers of car washes due to weather

conditions caused a decrease in revenue during the first two months

of the year, whereas March saw a return to double-digit growth.

The table below shows the sustained positive trend in revenue growth,

which continues in 2018.

Mainly as a result of the revenue performance, EBIT decreased in

the first quarter of 2018 by €6.7m to €5.4m (prior year: €12.1m). The

table below shows the sustained positive EBIT improvement.

Adjusted for currency effects, the shortfall on the order backlog was

almost fully made up by the end of the first quarter, with the order

backlog still only slightly below its prior-year level. New orders from

direct sales showed double-digit growth in the first quarter compared

with the prior year.

WashTec successfully participated in the CIAACE trade fair in Beijing,

presenting innovative solutions for state-of-the-art operating and pay-

ment systems.

Mr. Rainer Springs left the Company as of February 28, 2018.

He is to be succeeded as Chief Financial Officer from July 1, 2018 by

Mr. Axel Jaeger (51), working for Zeiss Group, most recently as

member of the Management Board and CFO of the Business Group

Semiconductor Manufacturing Technologies.

First quarter revenue

€91.5m

2014 2015 2016 2017

Revenue Q1 (with share of annual turnover) in € m, IFRS

64.8

2018

91.5

75.5 76.8

101.2

Growth trend sustained in

multi-year comparison

2014 2015 2016 2017

EBIT Q1 (with share of annual earnings) in € m, IFRS

4.3

–0.4

3.7

12.1

2018

5.4Positive long-term trend

in EBIT performance


Other operating expenses (including other taxes) decreased by

€0.3m to €13.7m (prior year: €14.0m).

Special emphasis is being placed throughout fiscal year 2018 on strict

cost management and the realization of efficiency gains.

2.2.2 Revenue and earnings by products and segments

As expected, first quarter revenue performance was driven by a

decrease in revenue in North America (by 41.1% or €9.0m), where

orders from major customers had led to exceptionally strong revenue

growth in the first quarter of 2017. In local currency, revenue in

North America was USD 15.8m (prior year: USD 23.4m).

Revenue in Europe remained largely stable. It fell slightly by 1.5%.

In the Asia/Pacific region, revenue increased by 15.6% compared

with the prior-year quarter. Revenue was increased both in China

and Australia.

2. Report on economic position

2.1 Dividend

The Management Board and Supervisory Board will be proposing a

dividend of €2.45 per eligible share at this year’s Annual General

Meeting on April 30, 2018. This equals a total distribution of €32.8m.

This corresponds to a dividend ratio for shareholders of some 89% of

net income. Based on the share price of €77.90 on March 31, 2018,

the dividend yield is 3.1%.

2.2 Earnings

2.2.1 Earnings and expense items

The gross profit margin increased on account of the altered product

and customer mix to 58.4%, compared with 57.9% in the prior year.

Despite the larger workforce and wage increases relative to the pri-

or-year quarter, personnel expenses went up by €1.2m to €33.3m

(prior year: €32.1m). The Group had 62 (3.5%) more employees at the

end of March than a year earlier. The size of the workforce has held

constant for the last six months.

Dividend of € 2.45 per

share

Revenue by segment, Q1

in € m, IFRS


Q1 2018 Q1 2017 Change

absolute

Change

in %

Europe 77.2 78.4 – 1.2 – 1.5

North America 12.9 21.9 – 9.0 – 41.1

Asia/Pacific 3.7 3.2 0.5 15.6

Consolidation – 2.3 – 2.3 0.0 0.0

Total Group 91.5 101.2 – 9.7 – 9.6

Earnings, Q1

in € m, IFRS


Q1 2018 Q1 2017 Change

absolute

Change

in %

Gross profit* 53.5 58.6 – 5.1 – 8.7

EBITDA 7.9 14.5 – 6.6 – 45.5

EBIT 5.4 12.1 – 6.7 – 55.4

EBIT margin in % 5.9 12.0 – 6.1 –

EBT 5.3 12.0 – 6.7 – 55.8

* Revenue plus change in inventory minus cost of materials


Both in Chemicals and the Operations Business, weather conditions

in the first two months resulted in lower numbers of car washes and

thus lower revenue. Both businesses generated growth in March.

Lower revenue in North America and Europe led, as expected, to a

reduction in EBIT in the two regions. In the Asia/Pacific segment,

EBIT improved as a result of higher revenue.

2.3 Net assets and financial position

Net operating working capital (trade receivables + inventories –

trade payables – prepayments on orders) decreased, mainly due to a

significant reduction in receivables, from €86.7m as of December 31,

2017 to €82.9m.

The cash inflow from operating activities (net cash flow) decreased

to €–0.8m (prior year: €13.7m). In the first quarter of 2018, the Com-

pany made a €7.9m prepayment for investment income tax. A refund

of payments made in the prior year is expected to have a positive im-

pact in the second half of the year. In 2017, both the prepayment and

the refund came in the first quarter. The downpayment on a regular

order from major customers for 2018 was, in contrast to prior year,

already made at the end of 2017.

The cash outflow from investing activities decreased by €0.8m to

€2.1m (prior year: €2.9m). For the full year, the Company expects that

capital expenditure will be down on the prior year.

The Company has negotiated an increase in the credit line with the

syndicate banks by €20.0m to €70.0m.

EBIT by segments, Q1

in € m, IFRS


Q1 2018 Q1 2017 Change

absolute

Change

in %

Europe 7.8 10.3 – 2.5 – 24.3

North America – 2.2 2.2 – 4.4 – 200.0

Asia/Pacific – 0.1 – 0.2 0.1 50.0

Consolidation – 0.1 – 0.2 0.1 –

Total Group 5.4 12.1 – 6.7 – 55.4

Revenue by product, Q1

in € m, IFRS


Q1 2018 Q1 2017 Change

absolute

Change

in %

Equipment and Service 77.4 85.0 – 7.6 – 8.9

Chemicals 11.1 12.6 – 1.5 – 11.9

Operations business and others 3.0 3.6 – 0.6 – 16.7

Total Group 91.5 101.2 – 9.7 – 9.6

First quarter EBIT margin at 5.9%


3. Outlook, opportunities and risk report

3.1 Outlook

The Company confirms that it aims for revenue growth of around

three percent for the full year 2018 with a significant increase in EBIT.

The outlook given in the Annual Report 2017 continues to apply. The

outlook is subject to uncertainties.

The Uniti expo trade fair takes place in Stuttgart from May 15–17,

2018. WashTec will be presenting the digital innovation »EasyCar-

Wash« for the business model of our customers. With a view to higher

sales in all weathers, »EasyCarWash« is a business model similar to

Spotify, Netflix and other systems based around unlimited consump-

tion for a fixed fee.

3.2 Opportunities and risks for group development

The WashTec Group’s opportunity and risk management system is

described in the Annual Report 2017.

4. WashTec shares and investor relations

The Management Board communicated with shareholders, journalists

and the financial community on an ongoing basis through the first

quarter. As part of the Company’s investor relations activities, Man-

agement took part in investor conferences and held road shows in

Frankfurt, Sydney, Melbourne, London and Lyon.

4.1 Share price performance

The WashTec share price was €77.40 on March 31, 2018. That marks

a slight decrease of 1.67% on the prior year-end closing price of

€78.70 as of December 30, 2017. The SDAX improved by only 0.34%

since the beginning of the year.

WashTec AG is currently covered by Hauck & Aufhäuser, HSBC

Trinkaus & Burkhardt, MM Warburg and Bankhaus Lampe. The price

target given by all analysts is at least €70.30 and ranges up to €90.00

(as of March 2018).

4.2 Shareholder structure

In the first quarter of 2018, there were the following changes in the

shareholder structure, which were reported to the Company in the

form of voting rights announcements in accordance with the German

Securities Trading Act (Wertpapierhandelsgesetz):

Dr. Kurt Schwarz notified WashTec AG that his share of the voting

rights on January 8, 2018 was now 6.82%.

Wellington Management Group LLP, Boston, Massachusetts, USA,

notified WashTec AG that its share of the voting rights crossed above

the 3.00% notification threshold on February 2, 2018 and was now

3.03%. Wellington Management Group LLP is attributed the shares

of Wellington Management Company LLP.

Stable shareholder

structure

Digital innovation “EasyCarWash” to be presented at Uniti trade fair in May


Manager Transactions

There were no manager transactions during the reporting period.4.3 Annual General Meeting on April 30, 2018

The Annual General Meeting of WashTec AG takes place in Augsburg on

April 30, 2018. The venue this year is once again the Chamber of Indus-

try and Commerce (IHK) for Augsburg and Swabia. The term of office of

the current Supervisory Board members Dr. Günter Blaschke and Ulrich

Bellgardt is due to end at the close of the Annual General Meeting. Both

are available for reelection. It is intended, in the event of their re-elec-

tions to the Supervisory Board, for Dr. Blaschke to be proposed as can-

didate for chairmanship and for Mr. Bellgard to be proposed as deputy

chairman of the Supervisory Board. The Management Board and Super-

visory Board are proposing a dividend of €2.45 per voting share at the

Annual General Meeting.

On March 29, 2018, the Company received a request to add an item to

the agenda from shareholder Paradigm Capital Value SICAV; the re-

quest was published in the Bundesanzeiger (Federal Gazette) on April 4,

2018. The request proposes a continuation of the Longterm Incentive

Program (LTIP) for the Supervisory Board. The Management Board has

endorsed the request.

Shareholding in % 31 Mar 2018

Axxion S.A. 9.99

EQMC Europe Development Capital Fund plc. 9.78

Kempen Oranje Participaties N.V. 9.60

Dr. Kurt Schwarz1 6.82

Investment AG für langfristige Investoren TGV 5.43

Paradigm Capital Value Fund2 4.58

Treasury shares 4.25

Diversity Industrie Holding AG 4.00

Wellington Management Group LLP3 3.03

Free float 42.521 Leifina GmbH & Co. KG et al.

2 Carne Global Fund Managers (Luxembourg) S.A.

3 Wellington Management Company LLP

Based on notifications made pursuant to the WpHG

WashTec AG Financial Statement Q1 2018 Selected Financial Information 10Q1 2018

Selected

Financial Information

Q1 2018


Consolidated Income Statement

Rounding differences

may occur.in €k Q1 2018 Q1 2017

Revenue 91,524 101,216

Other operating income 843 1,075

Capitalized development costs 583 987

Change in inventory 1,664 2,433

Total 94,614 105,712

Cost of raw materials, consumables and supplies and of purchased material 31,817 35,853

Cost of purchased services 7,918 9,234

Cost of materials 39,735 45,088

Personnel expenses 33,306 32,136

Amortization, depreciation and impairment of tangible and intangible assets 2,472 2,388

Other operating expenses 13,466 13,794

Other taxes 212 198

Total operating expenses 89,192 93,603

EBIT 5,423 12,109

Financial income 36 7

Financial expenses 132 107

Financial result –96 –99

EBT 5,327 12,010

Income taxes 2,619 3,436

Consolidated net income 2,708 8,573

Weighted average number of outstanding shares in units 13,382,324 13,382,324

Earnings per share (basic = diluted) in € 0.20 0.64


Consolidated Balance Sheet*

Assets

in €k

Mar 31, 2018 Dec 31, 2017

Non-current assets

Property, plant and equipment 39,946 40,603

Goodwill 42,312 42,312

Intangible assets 9,702 9,423

Trade receivables 9,195 9,024

Other assets 590 593

Deferred tax assets 4,165 3,922

Total non-current assets 105,910 105,877

Current assets

Inventories 44,886 40,847

Trade receivables 58,390 66,238

Tax receivables 13,559 7,928

Other assets 4,674 3,246

Cash and cash equivalents 7,121 9,786

Total current assets 128,630 128,045

Total assets 234,540 233,922

Equity and Liabilities

in €k

Mar 31, 2018 Dec 31, 2017

Equity

Subscribed capital 40,000 40,000

Contingent capital 8,000 8,000

Capital reserves 36,463 36,463

Treasury shares –13,177 –13,177

Other reserves and currency translation effects –6,095 –5,585

Profit carried forward 35,923 –427


95,823 94,191

Non-current liabilities

Finance lease liabilities 1,788 2,150

Provisions for pensions 10,212 10,247

Other non-current provisions 3,794 3,927

Other non-current liabilities 1,451 1,168

Non-current contract liabilities 1,227 2,638

Deferred tax liabilities 3,600 3,826

Total non-current liabilities 22,072 23,956

Current liabilities

Interest-bearing loans 14,320 13,726

Finance lease liabilities 1,153 1,058

Trade payables 14,053 14,612

Tax provisions 4,138 5,752

Other current liabilities 44,312 43,374

Other current provisions 9,783 9,932

Current contract liabilities 28,886 27,322

Total current liabilities 116,646 115,775

Total equity and liabilities 234,540 233,922


may occur.

*As a presentation improve-

ment, the structure of the

balance sheet was restated

for the actual year and the

prior year. For reconcilia-

tion, please see page 16.



may occur.

*Adjustment as of Jan 1,

2018 due to the first-time

application of IFRS 9

Financial Instruments.

Consolidated Statement of Changes in Equity

in €k Number

of shares

(in units)

Subscribed

capital

Capital

reserves

Treasury

shares

Other reserves

and currency

translation

effects

Profit

carried

forward

Total

As of January 1, 2018 13,382,324 40,000 36,464 –13,177 –5,586 36,490 94,191

Adjustment as of Jan 1, 2018* –566 –566

Income and expenses recognized directly in equity –538 –538

Taxes on transactions recognized directly in equity 28 28


As of March 31, 2018 13,382,324 40,000 36,464 –13,177 – 6,095 38,632 95,823

in €k Number

of shares

(in units)

Subscribed

capital

Capital

reserves

Treasury

shares

Other reserves

and currency

translation

effects

Profit

carried

forward

Total

As of January 1, 2017 13,382,324 40,000 36,464 –13,177 –3,550 27,677 87,413

Income and expenses recognized directly in equity –86 –86

Taxes on transactions recognized directly in equity 16 16


As of March 31, 2017 13,382,324 40,000 36,464 –13,177 –3,619 36,250 95,916



may occur.

Consolidated Cash Flow Statement

in €k Q1 2018 Q1 2017

EBT 5,327 12,010

Amortization, depreciation and impairment of tangible and intangible assets 2,472 2,388Gain/loss from disposals of non-current assets –10 –28Other gains/losses –1,306 –189Financial income –36 –7 Financial expenses 132 107Movements in provisions –296 –431Income tax paid –10,315 –11,766

Gross cash flow –4,033 2,081Increase/decrease in trade receivables 6,500 4,952Increase/decrease in inventories –4,419 –6,446Increase/decrease in trade payables –485 6,940Increase/decrease in prepayments on orders 723 4,947Increase/decrease in net operating working capital 2,319 10,393Changes in other net working capital 873 1,239

Net cash flow from operating activities –841 13,713

Purchase of property, plant and equipment (excluding finance leases) –2,165 –3,000Proceeds from sale of property, plant and equipment 38 94

Net cash flow from investing activities –2,127 –2,906

Free cash flow –2,968 10,807

Interest received 36 7Interest paid –125 –89Repayment of finance lease liabilities –272 –355

Net cash flow from financing activities –361 –438

Net increase/decrease in cash and cash equivalents –3,329 10,369Net foreign exchange difference 70 –54Cash and cash equivalents at January 1 –3,941 –1,504Cash and cash equivalents at March 31 –7,200 8,811

Composition of cash and cash equivalents for cash flow purposes:Cash and cash equivalents 7,121 9,300Interest-bearing loans –14,320 –489Cash and cash equivalents at March 31 –7,200 8,811


Consolidated Segment Reporting


may occur.Q1 2018

in €k

Europe North

America

Asia/

Pacific

Conso-

lidation

Group

Revenue 77,209 12,891 3,729 –2,305 91,524

with third parties 74,965 12,830 3,729 0 91,524

with other divisions 2,244 61 0 –2,305 0

EBIT 7,848 –2,234 –126 –66 5,423

EBIT margin in % 10.2 –17.3 –3.4 – 5.9

Financial income 36

Financial expenses 132

EBT 5,327

Income taxes 2,619

Consolidated net income 2,708

Q1 2017

in €k

Europe North

America

Asia/

Pacific

Conso-

lidation

Group

Revenue 78,396 21,918 3,239 –2,336 101,216

with third parties 76,094 21,883 3,239 0 101,216

with other divisions 2,301 35 0 –2,336 0

EBIT 10,323 2,225 –223 –215 12,109

EBIT margin in % 13.2 10.2 –7.2 – 12.0

Financial income 7

Financial expenses 107

EBT 12,010

Income taxes 3,436

Consolidated net income 8,573


Reconciliation Consolidated Balance Sheet as of Dec 31, 2017 due to a presentation improvement

Assets

in €k

Dec 31, 2017 Restatement Dec 31, 2017

after

amendments

in presenta-

tionNon-current assets

Property, plant and equipment 40,603 40,603Goodwill 42,312 42,312Intangible assets 9,423 9,423Trade receivables 9,024 9,024Other assets 593 593Deferred tax assets 3,922 3,922Total non-current assets 105,877 105,877

Current assets

Inventories 40,847 40,847Trade receivables 66,238 66,238Tax receivables 7,928 7,928Other assets 3,246 3,246Cash and cash equivalents 9,786 9,786Total current assets 128,045 128,045

Total assets 233,922 233,922

Equity and Liabilities

in €k

Dec 31, 2017 Restatement Dec 31, 2017

after

amendments

in presenta-

tionEquity

Subscribed capital 40,000 40,000 Contingent capital 8,000 8,000 Capital reserves 36,463 36,463 Treasury shares –13,177 –13,177Other reserves and currency translation effects –5,585 –5,585Profit carried forward –427 –427Consolidated net income 36,916 36,916

94,191 94,191

Non-current liabilities

Finance lease liabilities 2,150 2,150 Provisions for pensions 10,247 10,247

Trade payables 7 –7 0Other non-current provisions 3,927 3,927 Other non-current liabilities 1,161 +7 1,168 Non-current contract liabilities 0 +2,638 2,638Deferred income 2,638 –2,638 0Deferred tax liabilities 3,826 3,826 Total non-current liabilities 23,956 23,956

Current liabilities

Interest-bearing loans 13,726 13,726 Finance lease liabilities 1,058 1,058 Prepayments on orders 14,795 –14,795 0 Trade payables 14,612 14,612 Taxes and levies 6,806 –6,806 0

Liabilities for social security 1,536 –1,536 0 Tax provisions 5,752 5,752 Other current liabilities 38,713 +4,661 43,374Other current provisions 9,932 9,932 Current contract liabilities 0 +27,322 27,322Deferred income 8,846 –8,846 0Total current liabilities 115,775 115,775

Total equity and liabilities 233,922 233,922


may occur.

Contact

WashTec AG Phone +49 821 5584-0

Argonstrasse 7 Fax +49 821 5584-1135

86153 Augsburg www.washtec.de

[email protected]

Financial Calendar

April 30, 2018 Annual General Meeting 2018

July 27, 2018 Q2 Report 2018

Sep 24– 27, 2018 Baader Bank Investment Conference, Munich

Oct 26, 2018 Q3 Report 2018

Nov 26– 28, 2018 Equity Capital Forum, Frankfurt

q1 2018

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